Tax Administrators Say Incentive Is Tool For Investment

By Nformi Sonde Kinsai & Leocadia Bongben

Members of the Commonwealth Association of Tax Administrators, CATA, have identified tax incentives as an important tool in fostering investments and stirring economic growth in member countries.

 

Cross section of tax administrators at the Conference

This was one of the outcomes of deliberations of CATA delegates at the 29th technical conference of the association that held in Yaounde from November 9 to 14. Presentations at the conference centred on the 'role of taxation in economic development,' and 'information technology - opportunities and challenges for tax administrations.'

Various resource persons at the conference highlighted some of the common incentives to attract investment to include tax holidays; creation of industrial free trade zones; tax treaties; outright exemptions; discriminatory tax rates; favourable deduction rules for certain types of expenditure; credits for reinvested profit; amongst others.

They said priority sectors benefiting from tax incentives include manufacturing, tourism, agricultural production, infrastructural development, information technology, exportation, social development, etc.

Apart from attracting investments and boosting economic growth, the tax administrators also noted that incentives are meant for companies to create employment, encourage transfer of technology, foster redistribution of wealth, promote regional development balance, encourage capital accumulation and promote exports and savings.

The delegates from the close to 40 countries that attended the conference agreed that CATA member countries should undertake meaningful efforts to strengthen their tax policy analysis and create monitoring mechanisms for economic benefits and cost incentives.

The Post was hinted that the decision to accord tax incentives in Cameroon is in the hands of officials of the Ministry of Commerce who more or less act without consulting fiscal inspectors charged with tax administration. Some companies in Cameroon, The Post learnt, were judged not to be qualified for tax incentives but are accorded that privilege, giving room for suspicion of corrupt practices.

According to Essimi Menye, Cameroon's Minister of the Economy and Finance, well structured tax systems would be beneficial to the population. He said tax administrators must work hard to make people see the reason why they must pay their taxes.

Cameroon's Director General of Taxation, Laurent Nkodo, told delegates that the modernisation of the country's tax system is a priority for government.